Tariffs and economic uncertainty may soon affect us all.
Whatever industry you work in, you’ve heard the predictions. This could go really well for American companies—or it could lead us into a recession.
While we can’t tell you which way things are headed, we can look at ways to recession-proof your business.
Specifically, we can examine cost-saving measures in the realm of IT and technology. This is a great place to find an advantage in an unfavorable economy. Every business should examine these possibilities before a recession arrives.
Why are economists talking about a potential recession?
Global trade has entered a period of uncertainty with the United States’ new tariffs on imported goods. If other countries don’t respond to tariffs with trade terms that are more favorable to the United States, domestic prices will rise on those imported goods. Over the next few quarters or years, this could contribute to higher inflation rates or even cause a recession.
However, keep in mind that a recession is only one possible outcome from these policies. Different countries’ responses to tariffs will shape the impact that American companies feel from these policies.
As of this writing, it’s just too early to tell where we’re headed. We’re truly in a time of economic uncertainty.
How should businesses respond to this economic ambiguity?
There’s an old saying that holds true here.
Hope for the best, plan for the worst.
While we wait to see how tariffs will affect the economy, every business leader should examine the possibility of unfavorable outcomes. The goal is to recession-proof your business so you’re ready for the worst-case scenario.
When times get tough, businesses tend to experience intensified technology needs. You may end up with fewer staff resources or fewer funds for critical technology upgrades.
This leads us to an essential question.
How might a recession impact the affordability of IT support and technology solutions?
There are many factors at play here, but we’ll focus on three that may impact IT operations: Hardware prices, cloud services and software licenses, and staff hiring capabilities.
Hardware prices
In the short term, tariffs are likely to increase computer prices. Acer, a leading manufacturer of computers, has already promised to pass the cost of tariffs on to customers. We should expect the cost of all types of computer hardware to rise—including servers and network equipment.
Note that hardware as a service offers a welcome alternative to hardware ownership in difficult economic conditions. Rather than unpredictable capital expenses for hardware refreshes, you get 100% predictable monthly operating expenses. It’s a great model for companies that aren’t prepared to absorb volatile hardware costs.
Cloud services and software licenses
Hardware isn’t the only thing affected by these economic trends. “Soft” goods may rise in price as well. Cloud hosting vendors and software developers aren’t immune to broader macroeconomic conditions. If a recession materializes, we can expect the cost of cloud services and software licenses to increase as well.
Budget for staff hiring
A recession would also impact the ability of businesses to hire skilled talent. In the world of IT, that makes it harder to bring on the expert resources you need as staff hires.
Yet your technology needs don’t disappear simply because of difficult economic conditions. In fact, you may find your technology needs intensifying in a recession.
What technology investments are essential during a recession?
A recession demands technology investments that provide scalability, flexibility, and cost effectiveness. This means initiatives like:
- Business continuity planning, which can provide a buffer against sudden downsizing, unforeseen vulnerabilities, or catastrophic economic developments.
- Digital transformation, including cloud migration, automation, and the strategic use of data to gain a competitive advantage.
- AI adoption for greater efficiency and productivity.
- Cloud services rather than cloud servers to avoid overpaying for cloud systems.
- Doubling down on cybersecurity to avoid becoming an easy target in times of economic turmoil.
- Data integration for more efficient and accurate data transfer between systems and trading partners.
Of course, technology requires human expertise to implement and maintain it. And a recession makes it harder to afford that human expertise.
How can businesses recession-proof their IT support?
Businesses are always looking for ways to do more with less. And a recession tightens those screws.
When it comes to human expertise in technology, there are only two ways to cover your needs.
- Staff hiring
- Outsourcing
Typically, it costs more to deliver the same value through staff hiring as opposed to IT outsourcing. You need to cover fully loaded salaries and benefits, and you have to deal with churn when employees leave.
While some organizations can still justify staff hiring, these challenges drive others to outsource their technology needs to an MSP (managed service provider)—either through fully-managed services or through co-managed services alongside staff resources. (More on that in a moment.)
Whether your MSP covers it all or works alongside you, outsourcing is a great move as you prepare for a potential recession.
What are the benefits of IT outsourcing during a recession?
Here’s what you get when you engage an IT partner before or during a recession.
Cost savings, consistency, and cutting-edge capabilities
Outsourcing your IT needs to an MSP like Corsica Technologies offers significant cost advantages. MSPs have lower software, implementation, and management costs due to the economies of scale that come from serving multiple clients. MSPs also update their tools and approaches frequently, staying on top of emerging trends and best practices.
These advantages exist today, but they’ll become even more pronounced if the economy heads toward a recession. While MSPs aren’t immune to broader macroeconomic conditions, MSPs serve as a buffer between their clients and volatile markets for labor and technology.
This is especially true if the MSP offers 100% predictable monthly pricing.
Predictable monthly costs + unlimited service consumption
It’s rare to find an MSP who gives you 100% predictable monthly costs with unlimited service consumption.
But that’s what we offer here at Corsica.
If you work with us, our pricing model is a huge benefit during a recession. Your bill won’t suddenly increase as you consume more service hours. You can stick to a monthly budget—even as your support needs fluctuate up and down.
Cybersecurity service guarantee
Businesses may be more at risk of cyberattacks in tough economic conditions. Hackers recognize that companies may be more vulnerable due to lowered head count and the fact that reactive decisions (rather than proactive) are more likely in stressful times.
An MSP who offers a cybersecurity service guarantee is a huge benefit here. The right guarantee offers covered remediation services up to a certain amount if a cyberattack should occur. Learn more here: Corsica Cybersecurity Service Guarantee.
Expert team for the cost of ONE staff hire
When you work with an MSP, you gain access to a team of certified experts with diverse skillsets—and you avoid the overhead of employing each specialist directly. Depending on your needs and budget, you can gain the power of an entire team for roughly the cost of one staff hire. That’s a huge value compared to the cost of in-house resources.
24/7/365 support without scheduling headaches
It’s tough to provide 24/7/365 support with an in-house IT team. Staff may not want to work second or third shift—and scheduling them can be challenging.
MSPs provide essential support 24/7/365, without calling off or leaving you in the lurch. This ensures that issues are addressed promptly, which helps minimize downtime and negative impacts on the business.
Does outsourcing mean firing your IT team?
If you have an IT team already, an MSP who acts as a true partner isn’t coming for their jobs. Rather, a good MSP should recognize your limitations and shape their capabilities around your needs.
We call this arrangement co-managed IT services, in which your MSP manages your technology environment alongside your team. It’s a great way to expand your coverage, fill your gaps, and support the business in times of economic uncertainty.
Of course, right-sizing an IT team may be required in a difficult economic climate. No one likes to do this, but if there’s no other way, then an MSP can help fill those gaps at a significant cost savings.
How is Corsica Technologies different from other MSPs?
Not all MSPs are created equal.
In fact, some won’t recession-proof your business as well as others.
Here’s what sets us apart at Corsica Technologies. Every one of these benefits goes far in a recession.
- Easy to work with
- True all-inclusive pricing
- Great people + expertise
- Bundled IT services + security
- EDI + data integration
- Cybersecurity service guarantee
Want to learn more? Check out The Corsica Difference.
The takeaway: Don’t wait to recession-proof your business
It’s better to act now and plan for the worst than get caught unprepared. Here at Corsica Technologies, we’ve helped over 1,000 clients achieve their goals with the right technology. Our specialists in IT, cybersecurity, data integration, EDI, digital transformation, and consulting come together to create a cohesive strategy and IT practice for your organization. In a recession, our experts can help you support the business so you can focus on your core responsibilities.
Want to recession-proof your business?
Reach out to schedule a consultation with our outsourced IT specialists.
